Saturday, February 07, 2009 9:56:25 PM
A few notes from a conversation with IR on Friday:
1. ROTH PRESENTATION. The presentation at Roth on 2/16 WILL be webcast.
2. CEO. It sounds like the company is running on all cylinders. Kevin Donovan was working prior to his official start on Monday and hit the ground running, and he and Anna Houssels are already working well together as a team. Apparently he has quickly conveyed his enthusiasm to the company as a whole, where the energy level and excitement have increased. Everyone sees that the company is ready to move forward with the new products after the recent years where, of necessity, the focus was on getting the company stabilized. Kevin and Anna are in London visiting clients and, as we know, will be in New York with Lord Steinberg after the Roth conference to visit brokers and investors. Both of them have already been in touch with some of their past contacts about the cards, and there are a number of brand-building activities they are working on.
3. LEE COLE. Yvonne is always very complimentary to Lee Cole and his work in stabilizing the company. She noted that the successful Trafelet negotiation was carried out under his watch.
4. TOY CONVENTIONS. The company does not have booths at the toy conventions that happen at this time of year, but EGMI people (my notes aren’t clear about who) are there to do the necessary networking.
5. FUNCTIONALITY. As for functionality of the new cards, it looks like bige2533 was right in post #1351 about the low level of functionality on the current cards being almost entirely due to the need for them to be priced cheaply.
6. NEW LEVEL OF GAME QUALITY. Regarding the ability to jump to a new level of design/game quality, I asked about the designers, as people need to be really delighted with cards they will spend good money on. Yvonne said that the company continues to outsource the bulk of the creative activity, but it is to a group of people who are close to the company. My notes are not clear as to whether she said that customers are very sensitive to cost or whether she was saying customers are very sensitive to all the quality aspects of games, but I think it was the latter. In other words, these games have to be good, which was the point made by GWMAN concerning the Thomas license in post #1339. Those of us who like to see things for ourselves will have to wait a little longer…
Also regarding the new functionality, as new capabilities are developed in the cards, the company is coming across things that they believe can be patented, so we may be seeing “patent pending” notices on new cards.
7. A COUPLE OF QUIZ CARD SUBJECTS. The royal family (obviously for the UK) and world capitals.
8. NASDAQ LISTING & REVERSE SPLIT. Concerning moving to Nasdaq and doing a reverse split to enable it, two points:
a. It would require a shareholder vote to do a reverse split, and apparently there is a very wide range of opinion among large investors as to whether a reverse split is desirable. (In other words – NOT stated by IR – such a vote might not even be successful.) It is still being discussed, but this is not a front burner issue. [Personally, I think that the stock price could get where it needs to be without a reverse split in the same timeframe that would be required to accomplish a reverse split.]
b. The whole listing process, particularly when you have to include the shareholder vote aspect, is a long, expensive process. My impression was that there are many other things that management wants to spend its time, energy, and money on at this point.
9. BUYING BACK SHARES. [My personal opinion is that it was tremendous to buy back the preferreds at an excellent price but that it would be ridiculous for a small company with only a few million dollars in cash to be buying back common shares.] Yvonne pointed out that in the 2007 10K the company still had a going concern qualification. I THINK she said that the going concern qualification may be gone in the 2008 10K, and part of the reason is that the company maintained a sufficient level of cash vs. the level of debt.
Overall I came away with confidence, and bought a few more shares.
1. ROTH PRESENTATION. The presentation at Roth on 2/16 WILL be webcast.
2. CEO. It sounds like the company is running on all cylinders. Kevin Donovan was working prior to his official start on Monday and hit the ground running, and he and Anna Houssels are already working well together as a team. Apparently he has quickly conveyed his enthusiasm to the company as a whole, where the energy level and excitement have increased. Everyone sees that the company is ready to move forward with the new products after the recent years where, of necessity, the focus was on getting the company stabilized. Kevin and Anna are in London visiting clients and, as we know, will be in New York with Lord Steinberg after the Roth conference to visit brokers and investors. Both of them have already been in touch with some of their past contacts about the cards, and there are a number of brand-building activities they are working on.
3. LEE COLE. Yvonne is always very complimentary to Lee Cole and his work in stabilizing the company. She noted that the successful Trafelet negotiation was carried out under his watch.
4. TOY CONVENTIONS. The company does not have booths at the toy conventions that happen at this time of year, but EGMI people (my notes aren’t clear about who) are there to do the necessary networking.
5. FUNCTIONALITY. As for functionality of the new cards, it looks like bige2533 was right in post #1351 about the low level of functionality on the current cards being almost entirely due to the need for them to be priced cheaply.
6. NEW LEVEL OF GAME QUALITY. Regarding the ability to jump to a new level of design/game quality, I asked about the designers, as people need to be really delighted with cards they will spend good money on. Yvonne said that the company continues to outsource the bulk of the creative activity, but it is to a group of people who are close to the company. My notes are not clear as to whether she said that customers are very sensitive to cost or whether she was saying customers are very sensitive to all the quality aspects of games, but I think it was the latter. In other words, these games have to be good, which was the point made by GWMAN concerning the Thomas license in post #1339. Those of us who like to see things for ourselves will have to wait a little longer…
Also regarding the new functionality, as new capabilities are developed in the cards, the company is coming across things that they believe can be patented, so we may be seeing “patent pending” notices on new cards.
7. A COUPLE OF QUIZ CARD SUBJECTS. The royal family (obviously for the UK) and world capitals.
8. NASDAQ LISTING & REVERSE SPLIT. Concerning moving to Nasdaq and doing a reverse split to enable it, two points:
a. It would require a shareholder vote to do a reverse split, and apparently there is a very wide range of opinion among large investors as to whether a reverse split is desirable. (In other words – NOT stated by IR – such a vote might not even be successful.) It is still being discussed, but this is not a front burner issue. [Personally, I think that the stock price could get where it needs to be without a reverse split in the same timeframe that would be required to accomplish a reverse split.]
b. The whole listing process, particularly when you have to include the shareholder vote aspect, is a long, expensive process. My impression was that there are many other things that management wants to spend its time, energy, and money on at this point.
9. BUYING BACK SHARES. [My personal opinion is that it was tremendous to buy back the preferreds at an excellent price but that it would be ridiculous for a small company with only a few million dollars in cash to be buying back common shares.] Yvonne pointed out that in the 2007 10K the company still had a going concern qualification. I THINK she said that the going concern qualification may be gone in the 2008 10K, and part of the reason is that the company maintained a sufficient level of cash vs. the level of debt.
Overall I came away with confidence, and bought a few more shares.
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